This indicator, according to Rosenberg – revisions to analyst earnings projections:

"This means that the time to start turning more optimistic is when these earnings estimates estimates bottom out – ie. the downgrading process comes to an end. Now at the profit cycle peaks, the analysts are typically about 20% too bullish on their earnings estimates for the coming twelve months, which would then mean a trough somewhere around $80 EPS this time around – if past is prescient.

So this is a level I would be looking for before sounding the all clear that a lot of the "bad economic" news is priced in. In any event, I always say that there is no alarm bell that rings at the lows of the highs but this seems like a metric we can fall back on at some point to turn more bullish and add more significantly to equity market exposure.

It worked like a charm in March 2009 (though admittedly it would have got us into the market too early in 2002... but by mid-2003 the patience would certainly have paid off)."